Correlation Between Avino Silver and Bausch Health

Can any of the company-specific risk be diversified away by investing in both Avino Silver and Bausch Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Avino Silver and Bausch Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avino Silver Gold and Bausch Health Companies, you can compare the effects of market volatilities on Avino Silver and Bausch Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Avino Silver with a short position of Bausch Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avino Silver and Bausch Health.

Diversification Opportunities for Avino Silver and Bausch Health

0.16

Correlation Coefficient

Avino Silver  Bausch Health

Average diversification

The 3 months correlation between Avino and Bausch is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Avino Silver Gold and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies and Avino Silver is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Avino Silver Gold are associated (or correlated) with Bausch Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of Avino Silver i.e., Avino Silver and Bausch Health go up and down completely randomly.

Pair Corralation between Avino Silver and Bausch Health

Assuming the 90 days trading horizon Avino Silver Gold is expected to generate 1.13 times more return on investment than Bausch Health. However, Avino Silver is 1.13 times more volatile than Bausch Health Companies. It trades about 0.04 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.03 per unit of risk. If you would invest  92.00  in Avino Silver Gold on September 20, 2024 and sell it today you would earn a total of  40.00  from holding Avino Silver Gold or generate 43.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Avino Silver Gold  vs.  Bausch Health Companies

Avino Silver Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avino Silver Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Bausch Health Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bausch Health Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bausch Health is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Avino Silver and Bausch Health

The main advantage of trading using opposite Avino Silver and Bausch Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avino Silver position performs unexpectedly, Bausch Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bausch Health will offset losses from the drop in Bausch Health's long position.

The idea behind Avino Silver Gold and Bausch Health Companies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.